They /Fed/ are risking stagflation

If the Federal Reserve looks at this lower unemployment data while not taking potential workforce shrinkage into account, they can justify (to themselves, at least) keeping monetary policy softer for longer than it should be, risking more extended inflation.

Actually, it’s worse than that. They are risking stagflation. 

I noted early in this pandemic era that, like the Great Depression, it would bring unforeseeable long-term changes. They are starting to show themselves, but only as fuzzy outlines.

We know something big is coming. Exactly what it is, only time will tell.

John Mauldin 3 September 2021

https://www.mauldineconomics.com/frontlinethoughts/human-capital-losses


workforce shrinkage

https://englundmacro.blogspot.com/2021/09/labor-force-participation-rate-tried-to.html


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